Medicare Bill Fails Senate Cloture Vote

Late Thursday night, June 26, 2008, a measure for the Senate to immediately consider Medicare legislation failed by one vote. The Senate was to consider the “Medicare Improvements for Patients and Providers Act of 2008 (HR 6331),” passed earlier in the week by the House.

In addition to preventing a 10.6 percent cut to the physician fee schedule (PFS) due to take effect on July 1, 2008, HR 6331 contains a provision to permanently repeal the competitive bidding demonstration project for clinical laboratory services.  It also contains a provision that reduces the Consumer Price Index (CPI) payment update for clinical laboratory services by 0.5 percent for the next five years, in exchange for including competitive bidding repeal. This reduction provides $600 million in savings, and allows clinical laboratories to receive at least a partial CPI update for the first time since 2004.

HR 6331 also contains an 18 month extension of the “Grandfather Clause,” which would allow Medicare reimbursement for the technical component (TC) for pathology services provided to a “covered” hospital to continue to be paid to the laboratory providing the service instead of the hospital. “Covered hospitals” are defined as those having an arrangement with an independent laboratory that was in effect as of July 22, 1999. A six month extension passed late in 2007 is due to expire on June 30, 2008.

As previously reported, the Senate was scheduled to vote earlier  on Thursday on a motion to proceed (cloture) followed by a vote to pass the House bill (HR 6331).  However, due to objections raised by Republicans, they were unable to proceed and had rescheduled the vote for Sunday, June 29, 2008. In a last minute attempt to move legislation before the recess and the June 30^th deadline, Senate Majority Leader Harry Reid (NV) exercised his right to bring the bill up again late last night for a cloture vote, which requires 60 votes to pass. The vote failed 58-40. The original vote was 59-39, but Senator Reid changed his vote at the last minute to be on the winning side (“nays”). This preserves the right to bring the bill back up again at a later time.

After the vote failed, Senate Minority Leader Mitch McConnell (KY) offered a motion for a 30-day extension to prevent the cut to physicians. Senator Reid objected, so now Medicare legislation and the repeal of competitive bidding will not be considered until sometime after the July 4^th recess. This also means that as of July 1, 2008, the cut to the PFS will go into effect and the six month extension of the “Grandfather Clause” will expire.  

Any legislation that the Senate considers after the recess will likely include a retroactive fix to restore payment rates and offset the cut to physicians. It will do little to help with the administrative nightmare created by missing the June 30^th deadline.

As always, CLMA will continue to closely monitor and report to members the latest developments as they occur.